A few months ago I decided to invest in SmartThings, a company that allows users to control everything surrounding them in their life on their smartphone. Lights, air conditioning, even your house’s security system. What makes SmartThings so great is not only that you can connect with these devices, but you can connect them to each other using real world apps. SmartThings creates a service out of all of your existing hardware, which is something I love and is very much in line with the Hardware as a service line that we pursue at Fon. The Fonera was created not only as an device to share WiFi, but also to make your WiFi signal more functional, more useful for the user because it allows you not only to connect to WiFi at home, but all over the world.

We are moving towards a more connected world, towards a world where technology will let us automate our day to day to a greater degree. A future where our devices will “speak” to each other to resolve our needs. Wired magazine recently reported on the phenomenon. They called SmartThings the pioneer of the field, and explained the three stages that we’ll eventually pass through to reach this “programmable world”. The first: transforming everyday objects into intelligent ones, the phase we are in now in which you hardly find products that don’t offer internet connection or synchronization with other devices. The second: connecting these objects together and allowing them to “converse” with one another, which is what SmartThings is already attempting to accomplish by connecting smartphones to an array of objects such as A/C and lights fixtures. The third and last phase is the most futuristic: building apps based on this connectivity and having them linked to available outside data, to predict, say, weather patterns and lower your A/C accordingly.

SmartThings tackles all three phases in different ways, from a chip that can be put into almost any electronic device allowing control through the mobile app, to an app development platform and store allowing anyone to create, buy, and sell apps that connect your devices. In the end it’s about seeing hardware come to life and perform a service that makes our life better, more streamlined and more connected.

I am very glad they bought Motorola. Google has very little to lose buying Moto and a lot to gain. Motorola is affordable, has good IP, is in USA, and even though they clearly don’t make the best Android phones now Andy Rubin will make sure they do.

And $9.5bn is what Google could afford (Moto has $3bn in cash). HTC is a much better company but $50bn is tough even for a $150bn Google. Samsung impossible.

Now the challenge is to make sure that the level playing field continues that Samsung, HTC, Sony Ericsson and others don’t feel discriminated and if GoogleMoto wins is because they just make the best hardware/software experience.

Of course there is a risk that Android partners will try to help promote Windows Phone but for that they are late after Nokia and in any case mobile operating systems can hardly be pushed. Microsoft has so much cash and resources and with all their might WP is selling 15K units per day while Android sells 550K. A mobile OS is like a social network of geeks where the people are the apps developers. And in a mobile OS as in many other things in life, money can’t buy you love. It helps, but it doesn’t buy it.

I’m happy to announce that I invested in Busuu, the most active language learning community worldwide. Busuu already has over 2 million users and is growing rapidly, adding more than 10,000 new users each day. Busuu also overtook its two older and more heavily funded main competitors, as this chart shows.

How does Busuu work? In addition to providing the resources to enable individual language learning, users can interact with each other and engage in what Busuu calls “community learning”. Take me for example. Despite having a German wife, I still use Busuu to learn German. With the community feature, I can submit text exercises I wrote to be corrected by other users who are German native speakers. Sometimes I also use the instant video chat to practice speaking German (although I admit that I still have a far way to go :)). Being a native Spanish speaker, I could now help other users who are learning Spanish by correcting their exercises or talking to them directly.

The language learning market is huge – about $90 billion worldwide with around 1 billion people alone learning English. Busuu’s monthly revenue is a 6-digit figure and the company is already reporting positive cash flows. In addition to the 7 languages currently offered, Busuu is planning to add at least 4 more this year, including Mandarin and Japanese. They also launched several pilot projects with schools, universities and companies to enter the institutional market. And of course I should also mention the very popular Busuu iPhone app.

The CEO, Bernhard Niesner is a former student of mine at IE. He is Austrian, the company is based in Madrid. It’s amazing what this great team has been able to accomplish so far on their relatively small initial investment. Keeping up this capital efficiency and growth I see Busuu keeping its leadership in the enormous global language learning market. Busuu is the kind of investment I like because it fits my three key criteria for angel investing: a product I love, an entrepreneur I admire and a company I can help grow.

Here are some pictures of Johann, Adrian, Bernhard and me that Nina took at the signing:

As a result of these investments I get many pitches. More than I can handle. So I have two great people helping me look at these investments. One is Eduardo Arcos, the entrepreneur behind Hipertextual, the second largest blog network in Spanish in which I am an investor. The other one is Mahesh Kumar, a brilliant Indian student whose time I share with Result, a company in which I am also an investor. Now, other than that Eduardo and Mahesh are two great analysts, there is another reason I work with them going over pitches. Analysis is such a slow process.

So before getting more pitches, I would like to explain what my ideal format for getting pitches would be like. What I want is to get not the typical Power Point. Instead I want a TALKING Power Point. I want a Power Point in which I hit play and in 5 minutes I hear a presentation of the company narrated by the entrepreneur. I want to hit PLAY when I get a presentation not go over slides that were meant to be narrated but I still get 1999 style without video or sound. And of course it does not need to be in Power Point which I don’t even have (I use open source software to read PP). My ideal pitch could be slides with a small box for the entrepreneur to speak in video, or an alternation of the entrepreneur and slides, or simply slides with a voice over a la web demo. It could also be in stages. It could be 5 minutes and then the choice of… interested? Here’s some more. So if I like it and want to go in depth I can. These 5 minute pitches would make my day. And probably Eduardo’s and Mahesh’s day as well.

I would like to end by saying that my criteria to invest in a company are hardly objective. I only invest my funds, so I don’t need to have committees or fill up forms for liability protection. My criteria are: an entrepreneur with whom I would like to hang out with, a product I would love to use, and a valuation that is reasonable. But I have met some of the entrepreneurs I ended up mentoring through pitches, so I figured I would share my ideal pitch format with my readers.

My investors at Fon include most of the people and companies that were involved in the recent sale of Skype. At Fon we have eBay, Janus Friis and Niklas Zennstrom personally as investors and board members, Mike Volpi personally as an investor and board member, Danny Rimer as a board member and Index Ventures as an investor, and Marc Andreessen as an investor. So for me to talk about Skype after the recent dispute for the control of this company could be dangerous. But there´s no need to be concerned. This post is not about my opinions on what just happened at Skype as those are irrelevant here. Personally I think that Janus, Niklas, Mike, Danny and Marc are all awesome guys, amazing investors and board members. So what I will speak about is how I see the future of Skype and the dangers it may face and the opportunities it may have.

Before getting started I would like to say that I have been a user of Skype from the very beginning, from way before I actually met and became partners with Janus and Niklas, that I think that Skype is a remarkable product that is way ahead of the competition and that while not yet a highly profitable company, Skype has certainly been a gift to humanity. Now having sent my thank you note, let’s talk business.

Most communication on Skype as we all know, is totally free, only occasional calls to non Skype parties are the ones that generate the $740 million revenue run rate that allows Skype to make a living. The rest is love. And those revenues are under threat from three rivals.

The first one is called Facebook. While my friends inside Facebook have not disclosed anything to me, I think it is obvious that Facebook will soon have its own Skype. And what´s amazing about Facebook is that even though its pictures apps is mediocre in comparison to Flickr, its email pales in comparison to Gmail and its chat is way worse than that of Skype (no file attachments, no this, no this no that), the growth of those apps in Facebook is explosive. While I have been in Skype since 2004, on a recent check I had around 30 people I knew on Skype and 144 on Facebook chat. When Facebook incorporates a Skype like product, how many people will go on using Skype? Facebook is getting so big that soon there will be no Facebook Out. The threat that was Skype’s threat, namely how do you make money if everyone is on Skype and there is no Skype Out, is now being transferred to Facebook. But the thing is that Facebook, another gift to humanity, has a different business model, advertising, and they could really hurt Skype.

The second threat to Skype is flat rate pricing from telcos around the world. Why would anyone use Skype Out if they have an all you can eat tariff on their phone? And all you can eat tariffs are more and more frequent. In Europe all ADSL plans come with flat rates to all fixed lines, and in USA flat plans to fixed and mobile plans are more and more common. There are also community plans like calling anyone on AT&T for free that turns AT&T mobile into a Skype. It is remarkable that these plans are available to visitors such as myself and my family. We are six and when we go to USA everyone gets a phone with an AT&T card and we all call each other for free on prepaid! And telcos have one big advantage and that is that you don’t need a computer to make a phone call 🙂

The third threat is Google Voice. Google voice is interesting because it came out of the Google Talk fiasco and it shows how relentless Google is when it gets its mind set on something (disclosure Google is also an investor in Fon). What Google Voice is doing with the free phone calls attacks the very livelihood of Skype and that is Skype out. And the integration with Gmail and Gmail contacts is amazing. Skype is weak at that, it has no email. Google first copied Skype with Gtalk and it took off but not really. Google Voice is the second derivative of the Skype attack, and is going well. The $50 million acquisition of Grand Central that resulted in Google Voice stands up there with the acquisition of Keyhole that resulted in Google Earth as two of the best M&A moves of Google so far.

So considering that Skype is under attack from Facebook, the largest telcos in the world and Google how can it be a good business to buy Skype?

Well the key here for the new investors in Skype is not whether Skype will rule the world but whether it will be worth more than what the investors paid for it. And after giving you the cons here are some arguments and strategies in favor of the acquisition.

Skype is simple. Michael Arrington and all of Silicon Valley may find Google Voice amazing but is the average global citizen ready to use it? Massively use it? You download Skype, you find your friends on Skype, you talk. And if you don’t find them you Skype out. And when you talk you can also do video. I LOVE video calls on Skype. I used to use them for people I really cared about, relatives, close friends. Now I even do business calls on video with Skype. It just gives you more of a sense of what is going through the other person´s mind. And Skype is the leader on video quality. So simplicity plus video may be a good way to beat flat plans from telcos and avoid being Tivoed. If the video services can migrate to mobile phones Skype is on to something.

Skype can include advertising. If Gmail reads your emails and places ads why can´t Skype do the same thing on their chat or even their voice channels? How far are we from systems that listen to what you say and just as you finish saying “let´s go to Ibiza for the weekend” they start showing you cheap flights to Ibiza. Gmail proved that if you give people a great service they don’t care if you spy on them. That could be an enormous revenue source. So far Google has been kind to Skype even including it in the Google pack. Maybe a Google deal for advertising is in the making.

Facebook is not the only community in the world, there is Linked In, Xing and other business networks. Those “business types” work best with Skype. I believe that as Facebook squeezes everybody in its quest to Microsoft the world (Mark Zuckerberg told me that Microsoft is his model) a few Apples will emerge. Skype could be one of them. Apple has a tiny fraction of the PC market, Dell dwarfs it in revenues. But Apple dominates the over $1000 PC segment. Skype could position itself as the communicator of choice for businesses. And that has tremendous value.

Nina and I have been to Japan many times. But always to Tokyo, which we love. But on this trip we had a special situation going on. We are working on a significant project related to Fon in Japan, one of these complex deals that takes many people and significant time to pull off. And while my work was done by Monday I felt that it was wiser to “stick around” Tokyo in case something went wrong and my presence was needed again. But Fon has a very able management team that is in Japan as well so I also knew that it was possible that I would not be needed anymore. And that´s when the idea came about to stay in Japan but not in Tokyo. We chose to come to the Northern Island of Hokkaido following the recommendations of Joichi Ito and Joshua Ramo, two dear friends one who is Japanese and the other who knows Japan very well. The objective coming here was both to have fun and to be within an hour of flying time to Tokyo if we need to go back. But what we thought would be an easy driving around to get to know Japan turned out to be quite complex. Over the last two days we found out that Japan is really very inaccessible to foreigners. As we go around Hokkaido we feel that traveling Japan is like “hacking Japan”, hacking in the sense of building a “code” that helps you accomplish a task, but also hacking in the sense that it is very difficult to travel around Japan.

I don´t speak Swedish but I can rent a car and drive around Sweden, or Holland, or many countries in Europe whose language I don´t speak. But renting a car and driving around Hokkaido is something else. Almost everything here is in Japanese and very few people speak English. So here is our little story since we left Tokyo.

We were able to check in at Haneda airport and most procedures were normal but on the plane announcements were in Japanese only. Interestingly we were the only non Japanese on the plane and fortunately we liked the Japanese food they served as that was the only choice. No cutlery, no western food. I don´t know if you know this but the Japanese food that the Japanese normally eat has very little to do with the typical sushi restaurant that you are familiar with and probably love. The Japanese food that the Japanese eat is heavy on pickles and fish with very strong flavors. But the Japanese being Japanese, meaning extremely kind and considerate, as the stewardess spotted us she would stand by us and translate the announcements for us, and as she saw how I stared at the Japanese dessert in desperation she showed up with some cookies (I love most Japanese food but invariably dislike their desserts).

When we landed we went to rent a car at Nippon Rent a car and that was extremely complicated. It´s not that it would be extremely complicated if we had understood Japanese but as it was, we had a very hard time. There was nobody at the Nippon booth but they had a phone. I picked it up and the person on the other side of the phone did not understand me until I switched to what I discovered is the English that the Japanese understand which is basically me imitating their accent while trying to keep a straight face. I know this sounds absurd but in order to speak Japanese with the Japanese person you have to speak like they do, for example adding non existent vowels here and there, rolling the r´s in a peculiar way, changing the intonation to theirs, and only then do you begin to communicate with most Japanese. Because it´s not that the Japanese know no English, it´s that they never had a chance to practice it and mostly learned it from a Japanese person who spoke it like they do. So the lady on the phone who could not tell I was Martin Varsavsky on a first try, realized that I was Maritini Varisaviski on a second try. When she tried to explain to me how to get the bus to their car rental lot I struggled and as a result we lost a quarter of an hour until we were rescued by another kind Japanese person who saw my Japanese written leaflet and took us there. And once we got there, what was worse is that they would not rent me nor Nina a car without an International Driver´s license. The rules were incomprehensible. With a US license you need an International Driver´s License given by the AAA. With a German license you need to go to a public translator in Japan and get the German translated but surprisingly you don´t need an International Driver´s License. As you can expect we did not have any of those. But I had once asked for an International Driver´s License and managed to have it faxed from Spain. Even though it was expired, by 11pm the Nippon Rent a Car employees took pity on us and gave us the Toyota.

But our troubles did not end there. The car had a GPS as we wanted but the GPS was only in Japanese. In Japan btw even Windows comes only in Japanese. But we got over that one as well and by showing the map we managed to get somebody to program the GPS for us. In all these things I must say that the Japanese combine the inaccessibility of visiting their country with an unparalleled kindness that almost always gets you ou whatever mess you are in. Still it is tough.

And even with the programmed GPS if you are British you are Ok but for the rest of us another challenge begins in Japan and that is to drive on the left side of the road, listening to a GPS that talks to you in Japanese, with a toll system where the letters ETC do not mean etcetera but the exact opposite and where the normal roads are very narrow by other standards (in general I must say Japan is a “tight” country, everything is smaller than you would expect).

So getting around in Japan renting a car is very complicated. But as we discovered today there is another barrier if you want to film your very own Japanese road movie and that is that when it gets to be time to sleep hotels are CRAZY expensive. First of all there are very few. You can see that Japan is not a country in which people drive around. Or at least not Hokkaido. But when you find them it is unbelievable what they charge. We found 3. One had no rooms, the other one was $900 per night and the one in which we are staying is $600 per night. And our room is smaller than that of the average US motel by the road. Yes that price includes dinner and breakfast but interestingly meals in Japan are not expensive. Last night we had an amazing Miso Ramen and gyoza dinner for only $25 for 2. Today we had great Italian lunch for $30 for 2. So what is expensive is to sleep in Japan not to eat in Japan. And maybe Japanese people can read some Japanese signs that say hotel only in Japanese and that cost less. But we did not see any buildings with cars outside that looked like hotels after driving for one hour in the Furano area except the three that I mentioned. We are staying at one called Orika. So with a rental car that costs $120 per day plus tolls that frequently cost $15 and hotels that cost over $500 per night is is hard to recommend to anyone to “drive and explore Japan” as nice as people are.

So by now you know that it is extremely complicated to drive around Japan, that driving is on the left, places are hard to find, GPSs talk to you in Japanese and only come in Japanese and so are most signs, that people however are incredibly nice in sharp contrast with say, the French, that food is outstanding and affordable, that rooms instead are insanely expensive and hard to come by, now what about sightseeing? Is Hokkaido worth the detour as the Guide Michelin likes to say? And that is what I am not sure of, I am sorry to say. Especially not considering that anyone who wants to visit Japan from most places in the world has to spend half a day on a plane and that when you drive around Japan you must do it at the slowest speeds on the planet. In all roads that we were on except the highways the maximum speed was frequently 40km (not miles km) per hour or sometimes 60km. When we could not take it anymore we went at 80km in a deserted, straight road only to find that the only people there were the police who jump out of a bush and stop you. Japan is probably the only country in the world in which when you exceed the speed limit they can stop you…by foot. Of course they were very nice and did not give us a fine. They just scared us a bit cause when they jumped out of the bush with their flags I thought they were simply…crazy people.

So here´s a collection of pictures that I took today. In these pictures you find the only two places that I found worth photographing, the abandoned gigantic Buddha with a still functioning elevator inside that I am still trying to find out what it was, and a random kids fair. The rest is not exciting. As far as nature is concerned USA, Argentina, Spain are much better. As far as architecture is concerned it is not only that anything that you may think of Japanese is lacking. Unfortunately is is also that whatever you consider poor taste in home design wherever you are from is unfortunately frequently present in the Japanese landscape. I can show you random pictures of average homes around Japan and you will go back home to wherever you are from, USA, Italy, Spain, even Germany and kiss your own home town. And on top of this the Japanese suffer from a landscape that in Europe I have only seen in Switzerland and that is that they try to put everything in the same place probably because they have no room, even in Hokkaido. Whatever is not mountains must house everything else. So it´s hard to see a landscape without a power line, a factory, or a green house. But what is worse is that even when they do have nature, like in this hotel where we are staying tonight they build a high rise building. You can see it in their website. What is the point of building a high rise building smack in the middle of a forest. And here is another one around 20km from here. You look at the picture and you think it´s in the middle of Tokyo and not in the middle of a forest. So all this may explain two things. Why there are no foreigners in Japan but also why it is practically impossible to go around Europe without seeing Japanese tourists. It is probably as hard for them to come to see us as it is for us to come and see them and yet they make the effort. But they make the effort to come because it´s worth it. For the same reason we eat Japanese food, because it´s probably the best in the world.

During my business career I have founded 7 companies. The first, and least known, is Urban Capital Corporation, a company that develops and manages real estate in Tribeca, NYC. I started that company while I was at Columbia University together with my partner Len Kahn. We developed over half a million square feet of loft buildings. We currently own 32 Varick St or 11 Beach Street, a 120,000 sq ft building that is made of office lofts and is a favorite with high tech and media businesses.

My other companies are high tech companies. 3 got to be worth over half a billion dollars, one did ok, in one I lost 45 million dollars and while the jury is still out on Fon, I believe it could be my fourth company worth over half a billion.

During my business career in High Tech however, I have alternated between investing in my own start ups, occasionally backing other start ups (the most successful being Eolia started out of my office by my dear friend Miguel Salis, ex CFO of Jazztel and now worth over a billion) and investing in real estate both in Europe and in the USA. Investing in unleveraged real estate has proven to be pretty counter cyclical to high tech. For example when everything went to hell in tech between ’01 and ’04, real estate did very well. And while my timing for real estate has been occasionally wrong (I lost money in 2 hotels in USA in the ’90s) it has been mostly very good. I buy real estate with little or no debt and simply hold on to it. I have rarely sold any.

As an example, 2 weeks ago I bought an apartment at the Continuum in Miami. I bought it at a historically low price. And currently I have my eyes on a San Francisco apartment. Also in a prime building. Why am I adding to my US portfolio of properties? Because real estate is a long term play and I see US real estate at a historical low now both in terms of a low dollar and low values in key markets. So after staying on the sidelines for a decade I am now buying for the following reasons:

My brief view of the contemporary financial world is that George W. Bush and his team did horrendous damage to the US economy, but fortunately neither he nor his mismanagement style are coming back. During his tenure, I avoided the US dollar and anything US related. When we raised US dollars at Fon for example, we immediately, and smartly changed them into euros. But for the next decade I have a different view. I see a Europe unable to make the changes it needs to adapt to a globalized economy and I see America avoiding the mistakes of the past and adapting well. I see Bush as a one of a kind idiot. The fact that Americans chose Obama shows that there is hope in a more educated generation of American voters coming up more focused on substance than myth. That even if Republicans win again during the next 11 years, they will win with somebody more like Bush senior than Bush junior. I think that future US leaders will have common sense and will not dilapidate the country´s economy by fighting useless wars and probably at least partly address the other two huge “leaks” of the American economy: the cost of health care and the costs of administering “justice”. Concretely, and in favor of buying real estate, I think that Obama´s team will reactivate the US economy but will be left with some inflation that will likely do two things: help real estate, and help the US dollar as interest rates rise to stop it. Both are pluses for US real estate.

Bottom line of all this is that I am now converting euros into dollars to buy more US real estate for the first time in close to a decade. I also was lucky enough to change euros into pounds at 1.05 at the beginning of ’09 in anticipation of buying a home in London as well. London is and will be the global financial capital of the world, and right now, with the pound depressed and the markets down, it is a good time to buy there as well. So far I put in bids for different homes in London but they sold for more to others. Will keep trying.

I end with an anecdote. An hour ago this auction ended in Hawaii. I participated in it and I was surprised to see that the home sold for over $5 million. Especially considering how high the real estate taxes, maintenance and membership fees are in Hualalai. A person who buys a home in Hualalai has to spend around $250K in the membership, and an extra $150K per year in taxes and various fees. Plus of course getting to Hawaii. I confess that I was not prepared to pay more than half of what the home sold for. Now you could say, why would people pay so much for real estate that if lucky they will use for a month a year? The answer is that there is something to real estate prices that is akin to brand value. Real estate, surprisingly enough, elicits feelings. And the property I own is in those places, places that turn people on for some reason. Places that other than serving as useful homes make people feel better, like brands, for better or worse, do.

So while I will continue focusing on building companies around my ideas in Tech, I will also continue looking for the new or rising real estate brands. Currently I see them in South Beach, downtown San Francisco, the West End of London and Tokyo.

Yesterday we had our first in person presentation of the Fonera 2.0. It was in Paris. During this presentation I announced that the Fonera 2.0 will go for sale everywhere in Europe on April 21st. USA and Japan, Hong Kong and Taiwan will start in May. The promotional price for the launch will be 49 euros.

Here´s a video in English that explains some of what the Fonera 2.0 does which is basically to upload and download while you take your computer somewhere else and to convert 3G to WiFi.

Here´s a video of the event. It is in my poor French which is only as bad as Emilio Botín´s English as you can see in this video. In case you don´t know who Emilio Botin is he is the CEO of Banco Santander.

The unofficial unveiling was very understated and included pasta dinner, Spanish wines and French Cheeses at my Paris flat in Place des Vosges. Nina and my two sons were there. In an informal atmosphere with discussed the pros and pros of this new product (sorry, I just can´t get to say pros and cons). Reaction of the unveiling in my Spanish blog was very negative probably because we did not do the unveiling in Spain but then the French have adopted Fon in bigger numbers something the Spanish Foneros still can´t stomach.

As the main supplier of capital to Bernard Madoff with over $7bn raised from clients whose investments have now evaporated it is a fair question to ask if Andres Piedrahita of Fairfield and his father in law (and boss) at Fairfield Walter Noel were victims of Madoff or part of the scam. I have known Andres Piedrahita and his wife for 8 years now. Andres Piedrahita invested with me in some of my tech start ups through our mutual friend Adam Horne. So I have had enough dealings with him to at least have an opinion on this financial disaster that I would like to share with my readers. I think that it is more likely that Andres Piedrahita and Walter Noel were victims of Madoff than his partners in crime. Indeed it seems to be the case that even Madoff children were not part of the swindle. That they themselves lost money in his “fund”. After a telephone conversation with Andres this morning I heard that he and many family members including his father in law Walter Noel lost enormous amounts of their personal net worth in Madoff´s Ponzi Scheme. Tragically it seems that Andres and his family took money out from many other hedge funds and recently put it with Madoff as he was one of the only hedge fund managers “doing well” this year. Now why did not Fairfield Greenwich do more due diligence and find out that Madoff was a crook? Where they happy with all the commissions they were making and did not feel like investigating? Andres answer to this question was that they did have 2 PhDs assigned to checking Madoff out and that they were simply given fraudulent data. This is probably true because even the SEC examined Madoff´s operation twice and could not find anything wrong with it. I think that Madoff´s scandal is another proof that the global financial regulatory system is broken and needs serious rebuilding.

Most investors who trade stocks and other securities trade frequently. I don´t. I am your average broker´s nightmare. I probably do around 1 trade per month. This year I decided to share my portfolio in my blog. And it has not been a bad year.

In a post I wrote on May 4th I told my readers what I thought was going to happen with the dollar. I said that Europe was in worse conditions then what it looked like at the time, and that the US were in better conditions then what it looked like at the time. That while the dollar was in a seeming freefall that it was going to turn around. For my own portfolio I reversed a 7 year trend and started moving away from the euro into the dollar. And while I haven’t done any oil related transaction, last July I wrote in my Spanish blog that oil prices were absurdly high and they had to fall.

I started sharing what I was doing with my portfolio in early 08 with a post in which I recommended buying Apple stock (on January 23rd). Apple stock had fallen from $202 to $134 per share in less then 60 days and I loved the company, I bought shares and I told my readers I had done so.

So my two trades of the year until now were shifting my liquidity into dollars and buying Apple shares. Other than that my money was mostly in hedge funds that are down around 8% on the average this year. Bad but not as bad as the markets. And here´s another 3 trades I did. I bought TEO (Telecom of Argentina) mainly because I am Argentine and don´t think Argentina is going to hell again. I bought Citigroup and Bank of America because I lived in the States for 18 years and I can´t imagine the two leading US banks going to hell. But if you look at the stock performance of C and BAC you would think that everyone else seems to think they are going to hell. So I bought those shares. I also have bought shares of Cresud (CRESY) a very large landowner in Argentina for the same reasons. They trade as if fertileland will be worthless something that in this world of still very high food prices I don´t think will be the case.

I should also note that my investments are very long term. In 2001 when I switched to the euro I kept with it until 2008. The Apple, Citigroup, Bank of America, Cresud and Telecom of Argentina stock I’ve bought I also plan to keep for quite some time. And overall I don´t own in all these equities combined more than 5% of my net worth so until this year I had no stock exposure and now I have very little.